Working Paper: CEPR ID: DP2681
Authors: Marco Pagano; Ailsa A. Rell; Josef Zechner
Abstract: This Paper documents the aggregate trends in the foreign listings of companies and analyses both their distinctive pre-listing characteristics and their post-listing performance relative to other companies. In the 1986-97 interval, many European companies listed abroad, but did so mainly on US exchanges. At the same time, the number of US companies listed in Europe decreased. The cross-listings of European companies appear to have sharply different motivations and consequences depending on whether they cross-list in the United States or within Europe. In the first case, companies pursue a strategy of rapid expansion and large equity issues after the listing. They rely increasingly on export markets and tend to belong to high-tech industries. In the second case, companies do not grow more than the control group, and increase their leverage after the cross-listing. The only features common to all cross-listing companies are their large size and their tendency to be recently privatized companies.
Keywords: crosslistings; geography; going public; initial public offerings
JEL Codes: G15; G30; G39
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Larger companies (L25) | More likely to crosslist (D26) |
| Higher foreign sales (F23) | More likely to crosslist (D26) |
| Crosslisting in the US (N22) | Pursuing strategies of rapid expansion (L21) |
| Crosslisting in the US (N22) | Large equity issues (G12) |
| Crosslisting in Europe (N24) | No significant growth compared to control groups (C92) |
| Crosslisting in Europe (N24) | Increase in leverage (G32) |
| Need to raise equity for growth (O16) | Drives companies to US exchanges (G24) |
| Comparative advantages of US exchanges (G18) | Influence listing decisions (D91) |